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ILN Today Post

New Federal Law Limits Enforceability of Predispute Nondisclosure and Nondisparagement Clauses Related to Sexual Harassment

The Speak Out Act (the Act), which imposes limits on the judicial enforcement of predispute nondisclosure and nondisparagement provisions as they relate to sexual harassment and sexual assault, was signed into law by President Biden on December 7, 2022.OverviewThe Act provides that with respect to disputes involving sexual harassment or sexual assault, nondisclosure and nondisparagement clauses that were agreed to before a dispute arose are not legally enforceable in instances where the misconduct is alleged to have violated federal, state or tribal law. Read more…

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Do You Strive to Make Aspirational Benefit Claims? Lessons Learned from Recent Decisions

Environmental marketing claims have been a focus of regulatory, self-regulatory, and class action activity. While claims about past or present environmental benefits clearly require sufficient substantiation, companies should not assume that aspirational statements can be made with impunity.Earth Island Institute, an environmental nonprofit, sued Coca-Cola, claiming that the company deceptively marketed itself as sustainable and environmentally friendly, largely through the use of forward-looking aspirational statements. The Superior Court of the District of Columbia recently granted Coca-Cola’s motion to dismiss this case, finding that Earth Island Institute failed to allege that these statements were provably false or plausibly misleading. Read more…

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U.S. Department of Labor Proposes New Rule on Independent Contractor Status

The U.S. Department of Labor (DOL) proposed a new rule that aims to change how employers assess whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA). If adopted, the rule will use a multi-factor economic realities test to determine whether a worker is truly in business for themselves.

How Is This Rule Different?If adopted, the proposed rule would rescind a 2021 rule that placed increased importance on two factors when assessing a worker’s status: control over the work and opportunity for profit or loss. The proposed rule would return the DOL to a traditional six-factor test, which is historically more employee-friendly. The question of whether a worker is an employee or an independent contractor would rest on whether, as a matter of economic reality, the worker is “economically dependent on the employer for work or in business for themselves.” Read more…

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Colorado Privacy Act Draft Rules Issued

The Colorado Attorney General’s Office released Draft Rules for the Colorado Privacy Act (CPA). Issued on September 30, 2022 the Draft Rules address how the CPA will be implemented when it takes effect on July 1, 2023. A public comment period began Oct. 10 and will close Feb. 1, when the Colorado AG’s Office will hold a public hearing. Therefore, we are still months away from seeing the final CPA rules.However, given the upcoming requirements under the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), the Virginia Consumer Data Protection Act (VCDPA) and new laws in Utah and Connecticut, companies subject to the CPA should begin assessing their compliance obligations well before the new law takes effect. Read more…

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SEC Penalizes Kim Kardashian Over $1 Million for Paid Crypto Post

The Securities and Exchange Commission (SEC) settled with Kim Kardashian over allegations she violated Section 17(b) of the Securities Act (the “Act”) by publishing an Instagram post promoting the crypto-currency, EthereumMax token (EMAX), to her 250 million followers, without adequate disclosures. Kardashian received approximately $250,000 for this post.Under Section 17(b), it is unlawful for any person to publish or promote “any communication which describes a [purchasable] security for a consideration…without fully disclosing the receipt…of such consideration and the amount thereof.” Section 17(b)’s mandate to include the amount paid for a securities post goes over and above the more widely known Federal Trade Commission (FTC) requirement that all paid social posts be clearly and conspicuously disclosed as advertising. Read more…

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New York City’s “Guaranty Law” Remains Legal — For Now

When the COVID-19 pandemic struck in 2020, it brought New York City to a standstill. In response to the worsening pandemic, then Gov. Andrew Cuomo passed a series of Executive Orders mandating the closure of non-essential businesses with the intent of limiting the spread of the deadly disease. Many businesses in the City were forced to temporarily close and found themselves unable to meet their rental obligations.In response, New York City enacted Administrative Code § 22-1005, entitled “Personal Liability Provisions in Commercial Leases.” This provision is commonly known as the “Guaranty Law” and is largely intended to protect personal guarantors of commercial leases from facing liability for obligations incurred at the early height of the pandemic, between March 7, 2020 and June 30, 2021. While the Guaranty Law remains in effect, it is facing a significant constitutional challenge in federal court. Read more…

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California’s Amended Automatic Renewal Law Takes Effect July 1, 2022: What Subscription-Based Companies Need to Know

Businesses offering subscription-based products or continuous services must be ready to comply with California’s amended automatic renewal law (ARL), which takes effect Friday, July 1st. The update to the already robust ARL includes additional notice and cancellation requirements for free trials, as well as automatically renewing subscription plans. Gov. Gavin Newsom signed Assembly Bill 390 in October 2021, which amended the ARL. Read more…

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Update: Health Plan Considerations Now That Roe v. Wade Is Overturned

Update: This alert originally published on May 16, 2022, has been updated in light of the Supreme Court decision made on June 24, 2022, which overturned Roe v. Wade.In the wake of the Supreme Court’s opinion in Dobbs v. Jackson Women’s Health Organization, employers must immediately consider the group health plan implications now that Roe v. Wade has been overturned, which removes the federal protection of abortion rights and enables each state to set its own legal requirements regarding abortions. Without Roe, an estimated 26 states either already have laws on their books banning or severely restricting access to abortions, or are likely to pass such laws. This means that group health plan coverage of abortions may be available to participants in certain states and not others. The below provides an overview of group health plan considerations that plan sponsors and administrators should review with counsel. Read more…

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NCAA Takes Aim At Booster-backed “Collectives” and Their NIL Deals

Almost a year since the NCAA revised its guidelines to permit college athletes to exploit and monetize their name, image and likeness (NIL) rights, the collegiate NIL business has grown to almost $500 million. While the revised guidelines have benefited student-athletes considerably, a lack of uniform standards has led to confusion among states, limited oversight and questionable practices.States Wait for NCAA and NCAA Waits for FedsWhen states began passing legislation in 2019 enabling student-athletes to monetize their NIL rights, many delayed implementation with the hope that the NCAA would update its guidance to provide uniform rules. However, following the Supreme Court decision in Alston v. NCAA, concerns about antitrust challenges led the NCAA to implement a limited “interim policy” with little guidance on implementing NIL rules, while calling for Congress to pass federal legislation that would provide comprehensive national guidance. Read more…

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FTC Seeks Public Comment on Updating its Guidance on Preventing Digital Deception

The Federal Trade Commission (FTC) is seeking public comment on proposed revisions to its Guide, entitled “.com Disclosures: How to Make Effective Disclosures in Digital Advertising” (the Dot Com Disclosure Guides). Last year the FTC announced a new enforcement policy to crack down on illegal dark patterns, such as tricking users, trapping them into signing up for subscription plans or making it impossible to cancel ongoing billing and unauthorized charges. The FTC’s updates to the Dot Com Disclosure Guides are expected to address dark patterns and other deceptive tactics on the Internet. Read more…

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